Here is the question
Perfect Print, Inc. incurred the following direct material cost in November 2006 for high-volume routine print jobs:
Actual unit purchase price $0.016per sheet
Standard unit price $0.018per sheet
Quantity purchased and used in November 490,000sheets
Standard quantity allowed for good production 492,000 sheets
Calculate the material price variance and the material quantity variance.

Do cost drivers exist in a traditional accounting system? Are they designated as such? How, if at all, does the use of cost drivers in a traditional accounting system differ from those in an activity-based costing system?

Material Price Variance = Qa (Ps-Pa)
Where Qa is actual quantity used, Ps is standard/budget price and Pa is actual price

Material Efficiency Variance = Ps (Qs-Qa)
Where Ps is standard/budget price, Qs is budget quantity, and Qa is actual quantity used

You tell us what you think the answer is, and why and we will look it over for you.

Hint: Use the formulas.

Quote:

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Originally Posted by kemeria

here is the question
perfect Print, Inc., incurred the following direct material cost in November 2006 for high-volume routine print jobs:
Actual unit purchase price $0.016per sheet
Standard unit price $0.018per sheet
Quantity purchased and used in November 490,000sheets
Standard quantity allowed for good production 492,000 sheets
calculate the material price variance and the material quantity variance.

Do cost drivers exist in a traditional accounting system? are they designated as such? how, if at all, does the use of cost drivers in a traditional accounting system differ from those in an activity-based costing system?

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Cost drivers are used only in activity based costing system because it tends to determine the cost activity that affects most of the product cost